IDEAS home Printed from https://ideas.repec.org/h/bis/bisbpc/96-05.html
   My bibliography  Save this book chapter

Discussion of M S Mohanty and Suresh Sundaresan’s paper

In: The price, real and financial effects of exchange rates

Author

Listed:
  • Vidhan K Goyal

    (Hong Kong University of Science and Technology)

Abstract

Madhusudan Mohanty and Suresh Sundaresan examine the importance of the legal rights of creditors on a firm’s decision to hedge its foreign currency debt. They observe that firms sometimes hedge their foreign currency exposures and sometimes leave them unhedged. While there are a number of potential drivers of a firm’s hedging decision, an important driver that has previously not been explored is the strength of the bankruptcy code and the rights of creditors in default. Mohanty and Sundaresan make an important contribution by highlighting the importance of bankruptcy laws to a firm’s decision to hedge foreign currency exposures. They present a theoretical model of this choice with clear testable implications and then test the model in two very different empirical settings to show that bankruptcy laws matter for hedging decisions.

Suggested Citation

  • Vidhan K Goyal, 2018. "Discussion of M S Mohanty and Suresh Sundaresan’s paper," BIS Papers chapters, in: Bank for International Settlements (ed.), The price, real and financial effects of exchange rates, volume 96, pages 37-40, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:96-05
    as

    Download full text from publisher

    File URL: https://www.bis.org/publ/bppdf/bispap96_d.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bis:bisbpc:96-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Beslmeisl (email available below). General contact details of provider: https://edirc.repec.org/data/bisssch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.